I am a non-resident of Canada and I’d like to draw funds from my RRSP. What is the most tax efficient method?
Allan Madan, CA
Should you make a lump sum withdrawal from your RRSP as a non-resident, you are required to pay a flat 25% withholding tax to the CRA on the amount, which you will most likely never recover. A more tax efficient method would be to first turn your RRSP into an annuity such as RRIF. Depending on the tax treaty that the Canada has with your country of residence, the withholding tax on the annuity payment can be reduced to 15%.
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ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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